ED SCHULTZ, MSNBC ANCHOR: Good evening, Americans, and welcome to THE ED SHOW tonight from New York.

These stories on the table and hitting “My Hot Buttons” at this hour.

Well, we‘re two weeks out from the midterm election, and the president‘s party, I guess you could say, is on the ropes thanks to an avalanche of money from right-wing shadow groups. White House senior adviser David Axelrod joins me live from the White House in just a moment to talk about that. And what will the strategy be for the White House if we have to deal with some guy named “Speaker Boehner?”

Republicans are going deeper into gutter to unseat some of the strongest Democrats in the House. They are blatantly race-baiting against the Progressive Caucus chair, Raul Grijalva. The congressman and Reverend Al Sharpton will strike back at the bottom of the hour in “The Battleground” segment.

And shocking new details coming from that altercation between Joe Miller‘s goons and an innocent reporter. I will talk to an Alaska voter who saw the whole thing go down. It made her sick. That‘s coming up.

But this is the story that has me fired up tonight. We are two weeks out from Election Day in this country, and many people think it is the most important election in the history of the country. And basically, this is the landscape -- 99 seat of the House are in play, 15 seats in the Senate are in play, and the corporate money, without transparency, is guiding the force for the predicted Republican takeover. It‘s pouring in.

Americans, we are getting gamed by the Chamber of Commerce and Karl Rove, and I think that we are fools if we stand here silent.

Now, in the process, some folks in the media claim that unions, well, they‘re doing the same thing. That‘s nothing but garbage. Every dime—hear me—every dime is accounted for on behalf of the workers in this country who are in organized labor. So I think maybe the best way to explain this is let‘s just take this to a personal level.

If you get audited by the IRS, you can‘t be generic. You have to account for every expenditure and every expense. You have to justify it. I mean, it has to be in black and white. You can‘t be winging it in the political arena. On the other hand, the Chamber of Commerce and these outside interest groups are operating under basically a totally different set of rules.

Now, as a taxpayer, are you OK with that? Do you think that‘s fair?

We are on the road to elections being bought and paid for in this country. So, what‘s the strategy down the stretch for the Democrats? Can they match this money?

Joining me now White House senior adviser David Axelrod.

Mr. Axelrod, good to have you on tonight.

DAVID AXELROD, WHITE HOUSE SR. ADVISER: Thanks, Ed. Thanks for having me.

SCHULTZ: I can‘t let this story go. It‘s several weeks on now.

AXELROD: You should not let it go.

SCHULTZ: You can‘t match this money, can you?

AXELROD: No. No. And, you know, as the president said, our hope now is to match those millions, those tens of millions. It‘s going to be hundreds of millions of dollars with the voices of millions of Americans.

And, you know, I appreciate your sounding the alarm here. People need to be aware of what is going on.

This is an unprecedented thing. You have got these funds cropping up all over, orchestrated by Karl Rove, that are spending—that will spend hundreds of millions of dollars to influence this race. Let me give you an example.

Out in Colorado, Michael Bennet, the Democratic senator, has six different organizations running ads against him. None of them are disclosing where the money is coming from. Millions and millions and millions of dollars to try and tip that very important election against him.

And we don‘t—is it the oil industry? Is it the insurance industry? Wall Street? Foreign-owned companies? You just don‘t know, and they won‘t disclose it.

SCHULTZ: Yes.

AXELROD: You know, there is one group, Ed, that I really like because of the ironic name, called the Committee for Truth in Politics. And the Committee for Truth in Politics won‘t disclose who gives money to them. Their charter says they are to promote the social welfare in North Carolina, and they are running negative ads in California, Washington, Ohio against Democratic candidates.

This is really an insidious thing, and it‘s not just a threat to Democrats, it‘s a threat to our democracy and the power of everyday people.

SCHULTZ: All right. Karl Rove has been in the middle of all of this, and he, of course—I have always had the philosophy that he always attacks where he is weak. Here he is not long ago talking about all of the money and taking a shot at the president. Here it is.

(BEGIN VIDEO CLIP)

KARL ROVE, FOX NEWS CONTRIBUTOR: The president of the United States accused the Chamber of Commerce, and the Democratic National Committee, in its new ad, accuses Ed Gillespie and I of a criminal violation of our law by getting (ph) foreign money and spend it on American political campaigns, and they have not one shred of evidence to back up that baseless lie.

This is a desperate and I think disturbing trend by the president of the United States to tar his political adversaries with some kind of, you know, enemies list, with being unrestrained by any facts or evidence whatsoever.

SCHULTZ: Now, this story was a few days ago, obviously. So I took it a step further. Last night on this program, I had Leo Gerard, the head of the Steelworkers International.

AXELROD: Yes.

SCHULTZ: And let‘s play it the other way. This is Mr. Gerard. And I think this is a key comment here. Here it is.

(BEGIN VIDEO CLIP)

LEO GERARD, PRESIDENT, STEELWORKERS INTERNATIONAL: Our books are open. We are prepared to show anybody.

But I want the Chamber of Commerce and I want these other secret clubs that have materialized in the last three months to do the same thing. This is—Ed, I can‘t begin to tell you how distressful it is to think that our democracy is being put up for sale.

(END VIDEO CLIP)

SCHULTZ: Now, that‘s the key point, “Our books are open and we are prepared to show anybody.”

AXELROD: Exactly.

SCHULTZ: That is the entire issue, is it not?

AXELROD: It is the entire issue. When Karl Rove says they have no proof, of course no one can have any proof when they keep their books secret, when they say we‘re not going to show where you any of that money comes from.

The Chamber, Mr. Rove‘s group, and the more than dozen other groups that are running negative ads against Democratic candidates can resolve all this by simply opening up their books and letting people know where the money is coming from. And Ed, as you know, we tried to make that the law.

We had a bill in the Congress called the Disclose Act that would have simply required these organizations to disclose where the money is coming from for all these ads. And the Republican Party unanimously stood against it in the United States Senate, 41 senators wouldn‘t allow an up-or-down vote against it.

What is it that they are trying to hide?

SCHULTZ: Well, they are hiding foreign interests because that‘s where the jobs are going. There‘s some serious back-scratching going on here, in my opinion.

What do you say to those people, those critics, analysts out there who are purporting the idea that, you know this is just the White House looking for an issue because you are behind right now in a lot of polls? What do you think?

AXELROD: Look, I think this is fundamental. If you can have interest groups who can pour millions of dollars into these benign-sounding committees to tilt elections, it is going to fundamentally change our democracy.

As I said, this is bigger than just Democrats. And we have been talking about this since January, Ed, as you remember.

The president made this point in the State of Union speech when he said the Supreme Court had opened the door to the corporate takeover of our elections. Well, now we are seeing the manifestation of that concern.

And so this isn‘t a newfound complaint of ours. That is why we pushed for the Disclose Act.

And, you know, I will—I must tell you that Mr. Rove, back in 2004, when Democratic contributors were giving to third-party committees that disclosed their contributions, he complained that that was a threat to democracy. Now, they did it in the bright light of day. They gave it to political committees. They had to disclose their contributions.

Now he wants to—he is doing the same thing, except on a larger scale. And they won‘t disclose where the money‘s coming from, but he is fine with that now. A little bit of hypocrisy there. You know?

SCHULTZ: Sure. Well, if the Republicans get the majority in either chamber of the Congress, you can forget campaign finance reform. And if we were to believe the polls tonight, it looks like the Republicans could take over the House. If they do, this is going to be in place for 2012.

How is the Obama White House going to match this kind of corporate money? We all know they don‘t like the president. We all know who his enemies are. So the bottom line is, how in the world could you ever match this money going into 2012?

AXELROD: Well, obviously, that is something we are going to have to consider, Ed. We aren‘t going to give up the fight to try to get them to disclose this, and we‘re going to raise very high the banner of campaign finance reform.

Look, it makes no sense. If you and I give a contribution, we can give up to $2,300 and we have to disclose who we are, our address, what we do, and the world knows what we‘ve done. And yet, we have this parallel system in the shadows in which people can give $100,000, $1 million, $10 million—the captains of these industries and special interests—to defeat or elect candidates, and they don‘t have to disclose.

It makes the campaign finance system fraudulent, and it throws us back to the days of the robber barons and the Gilded Age. And we‘re going to keep fighting this fight. We‘ll deal with whatever happens, but it‘s not something we‘re going to leave alone, I‘ll tell you that.

SCHULTZ: How would the White House deal with “Speaker Boehner?”

AXELROD: Well, first of all, I am not willing to concede that we are going to be dealing with “Speaker Boehner.” I know he has been doing victory laps for some time, but we are going to work hard between now and November 2nd to see to it that that doesn‘t happen.

But look, here is my attitude. My attitude is that even if the Republicans don‘t take over, they are going to have more votes. They have completely—they‘ve acted irresponsibly for the last two years and sat on the sidelines while we tried to do things for—to move this country forward, to get us out of the ditch they put us in, to lift the middle class, to fight back against some of the special interest influence.

SCHULTZ: They have fought you on every jobs issue, haven‘t they?

AXELROD: Every single one of them, including, by the way, it took us months to pass a small business bill because they said they didn‘t believe we should help small business with lending. It‘s unfathomable, but we have to keep trying, and keep trying to hold them responsible and say look, we are both—we are all trustees of the future of this country, but we have to demand that they act responsibly and we have to direct the American people to what they do and don‘t do in the months and years to come.

SCHULTZ: Mr. Axelrod, there is no question that the president is working as hard as he can on behalf of candidates. I mean, it‘s in high gear.

SCHULTZ: Did the White House think it was going to come to this? Did you think that he was going to have to work this hard on the campaign trail? And it looks like the schedule is changing day to day. A month ago, it wouldn‘t have been this filled up.

What do you make of it?

AXELROD: Well, I don‘t know about that, Ed. I think we always knew we were going to have a tough election.

I sat in a room with the president in mid-December of 2008 when the economic advisers reported on what was about to happen and what was happening in the economy, and the full depth of it wasn‘t really widely known. But they were talking about the potential of a second Great Depression, the worst downturn since the Great Depression.

And as I left the room, I said to the president, “Here is what I can tell you. Two years from now, we‘re going to have a very tough election. All those who are called geniuses now will be called idiots, and your job approval will not be what it was because that‘s just the nature of this business.”

So we always were prepared for a tough election, and he is out there fighting because there‘s two choices here. One is to go forward and the other to go back to the same policies that punish the middle class, that drove our economy into a ditch. And we are just not willing to do that.

SCHULTZ: If I could leave you with a final thought on this issue, I find it terribly ironic that small business, of course the Republicans love to say that they are the party of small business. If a small business goes through an audit, they can‘t wing it.

You can‘t say to the IRS, hey, I‘ve got a general fund, you know? I mean, if you spend $30,000, $40,000 a year on entertainment expenses, you‘ve got to be able to document it. If you pony up for new equipment, and write it off, you‘ve got to be able to document it.

And here is the Chamber of Commerce taking money and hiding behind this general fund, and laying out all kinds of cash to work against the very party that has been trying to help small business. I would have never thought it came to this.

AXELROD: And you know, not just the Chamber, but all these other groups. And look, the point is this—if want to keep things secret, then you have something to hide.

Multimillionaire John Raese is trying to launch his political career by becoming the next senator from West Virginia. In a debate with Democrat Joe Manchin, the governor of that state, Raese slammed the health care bill as pure, unadulterated socialism.

(BEGIN VIDEO CLIP)

JOHN RAESE ®, WEST VIRGINIA SENATE CANDIDATE: I disagree with the fact that you‘re going to see insurance companies and doctors come under the penmanship of the federal government. I disagree with all of that.

What I‘d like to do, I‘d like to repeal every part of it because it is pure, unadulterated socialism. It is the worst bill that has ever come out of the United States Senate and House.

(END VIDEO CLIP)

SCHULTZ: Raese doesn‘t know a damn thing about paying an insurance bill, does he? This guy made his money the old-fashioned way. That is what he said, by inheriting it.

He spends much of his time living not in West Virginia, but with the super rich in Palm Beach Florida, hanging out at the local country club with his buddy “The Drugster.”

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I happen to know John Raese. He is a part-time resident here in Palm Beach, and he‘s got a locker right across the—right across the bench from me at a prominent local club. I have never played golf with him, but I have met him.

West Virginia is the second poorest state in the nation, kind of a series issue. Seventeen percent of the people live there below the poverty line.

Congress didn‘t pass a health care reform bill to help John Raese. They passed it to help families in West Virginia and across the country who can‘t dip into their trust fund to pay their hospital bills.

And one other thing that we should keep in mind is that if it‘s socialism, how many of you out there have been told you can‘t see your doctor? And have you noticed the profits of some of the health insurance companies since the bill was signed into law?

For more on that, let‘s go to Ohio Congressman Dennis Kucinich.

Congressman, good to have you with us tonight.

Is it socialism, Congressman?

REP. DENNIS KUCINICH (D), OHIO: Well, no it‘s not. But I just want to say, Ed, the people of West Virginia have to make their own decision.

I knew Senator Byrd. He cared about people. This was not a socialist bill. It‘s actually reform within the context of a for-profit system.

And we have to realize that the for-profit system is resulting, even now within this reform, in opportunities for health insurance companies to make even greater profits. We have to change the system.

I advocate a Medicare for all program. And even under Medicare for all, the government doesn‘t take over the hospitals. So, that scenario that you reported on, I don‘t know—it doesn‘t exist in country and chances are it never would.

SCHULTZ: It does not exist in this country. And the for-profit system is alive and well, post-health care passing of the bill.

United Healthcare, they are jumping profits for the third quarter, up 23 percent. There is nothing—there‘s no socialism about this kind of profit.

KUCINICH: No, there isn‘t. And what people need to understand is, under the current for-profit system, you know, until this bill changes it a little bit, one out of every $3 goes for corporate profits, stock options, executive salaries, advertising, marketing, cost of paperwork. It will change a little bit, but that‘s hardly a socialist system.

What I would be concerned about, if you call that socialist, how do you feel about Social Security? Because this is really an important question and people should ask all candidates, whatever state they live in, whatever office they are running for on a federal level.

SCHULTZ: Congressman, what‘s going to happen on November 2nd, in your opinion?

KUCINICH: You know, I‘m not a political analyst. I‘m not going to play one here.

I‘m a member of Congress who cares very deeply that people have real choices, that they understand that there are jobs on the line here, that everything we believe about the capacity of government to do good things, it‘s on the line, that government ought to be investing in building new infrastructure. It should be creating millions of new jobs. We should have trade laws that stop the movement of our jobs out of this country.

I mean, this—I‘m hopeful we will focus on the economy. And if that happens, that the people will make the best decision. And I‘m hopeful that the Democrats will be given another chance to try to straighten out this dreadful economy that President Obama inherited.

SCHULTZ: Well, there is no question that if the Republican does take charge in one or both houses of the Congress, they are going to repeal health care.

KUCINICH: Well, I‘m not sure that‘s going to happen, and let me tell you why. Because if there was an attempt to repeal, I think that the president would veto it. And they‘d need two-thirds of the votes to override the veto. That‘s unlikely to happen.

So I think that what we have to look at here is that you have so many American families who are struggling to make ends meet, who may have a child who has a pre-existing condition. That child deserves to have some coverage—who may have a child who needs to be on their policy through age 26.

I mean, we have to remember that this legislation, however flawed it was—and I have been on your show many times over the last couple of years pointing out the flaws in the present system and in this new bill. But let‘s face it, it does help some people.

It moves us in a direction where insurance companies aren‘t controlling everyone‘s life anymore. And so, you know, even worse than government controlling corporations, Ed, is corporations controlling the government.

SCHULTZ: Congressman Dennis Kucinich, always a pleasure. Good to have you with us.

KUCINICH: Thank you.

SCHULTZ: And speaking about John Raese, he got an endorsement today from Sarah Palin. But get this—in typical Sarah Palin form. She tweeted her endorsement for Raese to Pennsylvania.

Oops. The only problem is that Raese is running in West Virginia.

Just a minor detail there. Just unbelievable.

Now, if you thought that was psycho, wait until you hear what Sarah Palin‘s pal, Christine O‘Donnell, just said. She has no idea what‘s in the Constitution. We the people at THE ED SHOW establish her as a “Psycho Talker,” next in “The Zone.”

SCHULTZ: And in “Psycho Talk” tonight, self-proclaimed constitutional scholar Christine O‘Donnell. Well, she needs, I would say, a refresher course.

Now, this morning, O‘Donnell debated her Democratic opponent, Chris Coons, at a Delaware law school. She asked a question that got the legally-minded crowd howling with laughter.

(BEGIN VIDEO CLIP)

CHRISTINE O‘DONNELL ®, DELAWARE SENATE CANDIDATE: Where in the Constitution is the separation of church and state?

(LAUGHTER)

CHRIS COONS (D), DELAWARE SENATE CANDIDATE: The First Amendment establishes the separation, the fact that the federal government shall not establish any religion and decisional law by the Supreme Court over many, many, many decades.

O‘DONNELL: The First Amendment does? You‘re telling me that the separation of church and state is found in the First Amendment?

COONS: Government shall make no establishment of religion.

O‘DONNELL: That‘s in the First Amendment?

(END VIDEO CLIP)

SCHULTZ: Yes, Christine, it‘s in the First Amendment. In fact, it‘s in the first line of the First Amendment: “Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof.”

Christine O‘Donnell is way in over her head, no doubt. Not recognizing the First Amendment when it‘s recited to you and having to ask for a definition of two-highly debated amendments, it‘s pathetic “Psycho Talk.”

Coming up, Sarah “Barracuda.” Well, she can‘t stop telling the Tea Party to reload, and her wacko followers can‘t stop the race-baiting.

Check out this mailer. It gives Arizona Congressman Raul Grijalva a huge, oversized bandito mustache. Mr. Grijalva and Reverend Al Sharpton will blast off in this subject next in “The Battleground” story.

Also ahead, I am hammering Chris Christie, governor across the river, for being a job killer.

And a madam, a Black Panther and “Crazy Carl” turned last night‘s gubernatorial debate here in New York into the Big Apple circus.

Don‘t go anywhere. You are watching THE ED SHOW on MSNBC. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. The “Battleground” story tonight, well, Republicans basically are on a mission to systematically knock out the most progressive members of the Congress in this election cycle. Sarah Palin kicked off her Tea Party bus tour by reloading this old line.

(BEGIN VIDEO CLIP)

SARAH PALIN ®, FORMER ALASKA GOVERNOR: You‘ve been ridiculed, you‘ve been mocked, you‘ve been plundered by the left, still though, you didn‘t let big government-loving professional politician, then the complete left wing mainstream media tell you to sit down and shut—tell you to sit down and shut up and still, no, you didn‘t retreat. You reloaded, you came out even stronger and you‘ve turned this country around.

SCHULTZ: You get some new material? The other half of the losing ticket is also doing his part to target liberal members of the Congress. John McCain and his old buddy, Jon Kyl of Arizona are trying to convince Arizonans to oust progressive Congressman Raul Grijalva.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA: Arizonans are struggling, yet Raul Grijalva voted for the failed stimulus, Obama-care and tax increases that have devastated our state and nation.

SEN. JON KYL, ®, ARIZONA: Grijalva even let the call for a boycott of our own state that cost Arizona jobs and millions of dollars, hurting us all.

(END VIDEO CLIP)

SCHULTZ: Well, there you have it. The biggest guns in the Republican Party are trying to unseat Grijalva because, you see, he is a tell-it-like-it-is Democrat. Grijalva is a single payer guy and one of the strongest voices against radical Arizona immigration law that was been a big topic of conversation this year. The four-term congressman is also facing the ugliest, racist side of the Republican Party. Now this is the Arizona GOP. They are running with this mailer for their candidate, Ruth McClung, showing Grijalva with this mustache. Now, you be the judge, is that racist? The Republicans will stop at absolutely nothing to scare old, white, low-information voters.

Joining us now is the Arizona Congressman Raul Grijalva and co-chairman of the progressive caucus. Congressman, good to have you with us tonight. I‘m almost embarrassed to ask you for your reaction to this, but that is the story. What is your reaction to being depicted as a bandito that‘s being shipped around the State of Arizona?

REP. RAUL GRIJALVA (D), ARIZONA: Ed, it is a pattern and I‘m not the only one that‘s been inflicted by this. You know, we are questioning our president‘s birthplace, which is a nonissue. And this issue is a very convenient way to cover up the inability to really articulate what the positions are of the Republican Party. They are for privatizing Social Security. They don‘t want to talk about that. The people of the 7th district in Arizona reject that. They are for destroying public education.

The people of the 7th district reject that. They are for giving more tax breaks to corporations and the very rich in this country. The people of the district reject that. And so it is convenient to demonize, marginalize people and therefore in a very convenient and calculated and well-planned attack, squirt away from the issues. And the fact that, you know, you have John McCain who has found his tea cup and joined the party during the primary when he feared that he was going to be taken out by the Tea Party activists.

SCHULTZ: But congressman, the birthers and the Tea Parties have questioned the president‘s citizenship. This is the Republican Party in Arizona that is mailing this around. This is now standard operating procedure for the GOP in Arizona. Has it been this low before?

GRIJALVA: Not in my recollection. You know, the political battles have always been heated and pitch but never have we resorted to distortion, to demonizing or marginalizing people. It‘s an old tactic with a whole new twist and it‘s ugly.

SCHULTZ: That is the first time I‘ve ever seen two senators in a commercial talk down the competition and state things that simply aren‘t true. Did your position kill jobs in Arizona?

GRIJALVA: No. The positions that the two senators and the positions that Sarah Palin is taking and that my opponent has embraced fully are what kills jobs in this state. Their inability to deal with a real fiscal policy, the deficit that they created while they were in power in Congress and then the White House, those are recreated problems that we are trying to solve but we get no credit. All we get is a demonization that you‘re seeing not only by the air but also in the mailers that are going out, not just in my district but all over the country and to my other colleagues in the state.

SCHULTZ: But congressman, you have never been targeted like this before. This is a new area, is it not? I mean.

GRIJALVA: Yes. I think—it‘s—we have—we have a presence. We not only have a presence in our district but I think we have a national reputation and I‘m a target. I was a target with—when 1070 came out. I was a target during the discussion of economic sanctions and we knew that. We knew that going in, we know what kind of a fight we‘re in. But it‘s been very gratifying, the grassroots across this country have been very supportive and it‘s been uplifting for our campaign, both the volunteers and the donations, so, we are in the fight, we are not backing out and we are going to stick to our guns.

SCHULTZ: Congressman, good to have you with us tonight, I appreciate your time. Thanks so much.

GRIJALVA: Thank you, Ed. I appreciate it.

SCHULTZ: You bet. For more on the conservative race-baiting, let‘s bring in Reverend Al Sharpton, president of the National Action Network, who has been in Pennsylvania, Florida, California and on his way to Ohio very soon. Reverend Al, are you seeing this kind of garbage around the country? Is there a mood, an angst at a level you have never seen before?

REV. AL SHARPTON, PRESIDENT, NATIONAL ACTION NETWORK: Yes, I am seeing it at a level we have never seen. There‘s even points of people being bullied at voting sites in Texas. I just left Florida this morning. And I think that what is ugly, as you pointed out, Ed, is that in Arizona, this is the official Republican Party. This is not even the Tea Party or some fringe group.

SCHULTZ: Is that racist?

SHARPTON: I think that when you play into a racial stereotype, which is clearly trying to present the congressman in a perverted bandito kind of image, playing in a racial stereotype is racist and I think it is wrong no matter who does it on any side of the spectrum. I agree with the congressman. It also means that you really can‘t argue on issue and policy. You have to try to play to hopefully people‘s base biases and I hope the people of that—not only that district but the country will not go backwards into that. I‘m surprised that someone like Senator McCain, who I may disagree with a lot of his policy, will not denounce his state party but even being identified with any kind of stereotyping in terms of...

SCHULTZ: Well, that was my next question. I wonder if Jon Kyl and John McCain endorse that kind of campaigning because clearly it is offensive. On another note in Nevada, Sharron Angle talking in front of high school kids, told the Latino students there that they kind of look Asian. What is your response to that?

SHARPTON: Well, I mean, again, here are we dealing with ethnic, race, nationality. What does that mean, you kind of look Asian? How do you define that? And what does that have to do with talking to young people, that we all ought to be trying to unite as Americans who have different backgrounds, different cultural orientations, but at the same time, we are trying to uplift them to be the best Americans?

SCHULTZ: Yes.

SHARPTON: This playing, this card of ethnicity and race to be divisive, not to challenge inequalities, I think it‘s unhealthy and shouldn‘t be in the public discourse of a political campaign.

SCHULTZ: Reverend Sharpton, always a pleasure. Thanks for your time.

SHARPTON: Thank you.

SCHULTZ: Now let‘s get some rapid fire response from our panel on these stories.

Mr. Constitution, Joe Miller, had high praise for the communists while talking national security. He thinks the United States should follow the example of East Germany? And two weeks out from the midterm elections, our new NBC poll shows the president‘s job approval is at 47 percent while a clear majority disapproves of the president‘s job that he is doing on the economy.

With us, democratic strategist, Todd Webster and republican strategist, Karen Hanretty. Let‘s talk about the poll first. How damaging is this or does it bring back—slow the momentum, so to speak, the president has been out there on the road a lot, Todd Webster. What do you make of the numbers here? They are not good.

TODD WEBSTER, DEMOCRATIC STRATEGIST: Well, look, George H. W. Bush in 1990 was polling low in now ‘90s, his party lost, I think he was about seven seats in his midterm election. The reality is Barack Obama is not on the ballot anywhere in the country. Each of these candidates and the House and in the Senate and the governor‘s race are running on their own records and I think the reason why Democrats now in this last month are doing much better is because voters are taking a look at each of the candidates on the ballot and they‘re determining for themselves which candidate is on my side and which candidate is pushing for more tax cuts for millionaires and is that going to actually.

KAREN HANRETTY, REPUBLICAN STRATEGIST: Yes, that‘s right. President Obama is not on the ballot, but if you listen to democratic pollsters, they will tell you that the president‘s approval ratings are actually dragging down their candidates. An example just this evening is one of the democratic pollsters, PPP, sorry, I don‘t recall what it stands for, you know who they are, they just have a poll right out on the Washington Senate race, Dino Rossi and Patty Murray. Those numbers are stuck.

Patty Murray is down and the democratic pollsters are saying that President Obama is upside down in the state and he‘s dragging down these numbers. And don‘t—here is how I would look at these numbers right now about President Obama. Don‘t look at the nation—national approval rating, look at his approval rating in all of the Senate seats and then they highly contested House seats where he is at in those areas and he is much further down than 47 percent. And that is why it is.

WEBSTER: Ed, if you look state by state, boxer in California, Murray in Washington State, Feingold in Wisconsin, Manchin in West Virginia, Sestak in Pennsylvania, all of these Democrats are moving up, they are in the lead and they have got momentum on their side. And that‘s what happens.

HANRETTY: Feingold is not in the lead.

(CROSSTALK)

WEBSTERS: Take a look at these races individually and match them up and figure who they are going to vote with.

SCHULTZ: I agree with you all of them but I think Feingold, I think.

HANRETTY: Actually, that‘s not accurate. Feingold is not in the lead and Murray is not in the lead.

WEBSTER: He is closing and it is now a tie race. He has made up seven points in the last week.

SCHULTZ: OK. So, you‘re saying that the poll numbers don‘t mean anything, Todd, that running with the president is still good medicine for the Democrats who are out there?

WEBSTER: I‘m saying that each of these races is—will be decided not by Barack Obama but by the candidates on the ballot, republican and a democrat.

SCHULTZ: All right. This is a comment from the town hall, the infamous town hall meeting with Senate candidate Joe Miller up in anchorage, Alaska, talking about border security. He says, “The first thing that has to be done is secure the border. East Germany was very, very able to reduce the flow. Now, obviously, other things were involved. We have the capacity, too, as a great nation, secure the border, if East Germany could, we could.” Now we all know, history tells us that they were pretty radical about shooting people that were trying to get across the border. What do you make of this, Karen Hanretty?

HANRETTY: Ed, last week, I was on your show and I told Republicans they didn‘t need to talk about the minimum wage. This week, I‘m here to say, they don‘t need to talk about East Germany. This is just—this is just a bizarre statement. It was a bad analogy. What he needs to stick to is stick to the size of the federal government, stick to this increase in taxes, stick to the economy and these messages that are what helped him win that primary race in the first place and what will get him across the finish line.

SCHULTZ: Well, I think there is a connection. He wants to shoot people at the border and wants to handcuff reporters. So, that‘s where we are with this guy.

HANRETTY: I do like the idea of handcuffing reporters though.

WEBSTER: But for a guy who accused Barack Obama of leading us to socialism to now hold up the last great socialist county as a paragon of how America.

SCHULTZ: Coming up, I have another big bone to pick with the republican Governor Chris Christie. He is “psycho talk” and at rallies across the country instead of finding ways to keep a huge jobs project alive.

Senator Lautenberg is fed up with Christie. He will sound off next in the playbook. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: And it is not too late to let us know what you think. The number to dial is 1-877-ed-msnbc. Tonight‘s telephone survey question is, do you trust Republicans to play by the rules with election money? Press the number one for yes. Press the number two for no. Again, the number to dial is 1-877-ed-msnbc.

(COMMERCIAL BREAK)

SCHULTZ: And in my “Playbook” tonight, New Jersey Governor Chris Christie is a job killer, plain and simple. He vowed to walk away from the country‘s largest public works project unless someone else pays for it, the planned tunnel would run between New Jersey and New York City and would create almost 3,000 construction jobs and almost 16,000 permanent jobs in New Jersey alone. But Christie doesn‘t care. He said this, “I don‘t want to hear about the jobs that it will create if I don‘t have the money to pay for the payroll. It will not create the jobs. This is not a difficult decision for me.” Transportation Secretary Ray LaHood recently convinced Christie to hold off on killing the project while other funding options were explored but instead of working on a solution, Christie is out campaigning for Republicans all over the country. The governor could pull the plug for good this Friday.

Joining me now New Jersey Senator Frank Lautenberg. Mr. Lautenberg, excuse me. He was at a rally today to support the tunnel alongside union members and fellow New Jersey Senator Robert Menendez. Senator, why is this so important if the money is not there, according to the governor?

SEN. FRANK LAUTENBERG (D), NEW JERSEY: Well, first of all, we have to decide whether or not we are going to even try to go ahead with this thing. As it stands, the governor supported this plan with a letter to the DOT secretary in April. In his campaigning for the governor‘s job, he said he was fully behind the tunnel.

LAUTENBERG: Well, he backed down. Well it is not unusual for the governor to change his mind midstream and this is one time when changing his mind is a terrible thing. We are looking at not 3,000 but 6,000 jobs building the tunnel and ultimately winding up with 44,000 permanent jobs. And it is a fantastic opportunity for people to get to work in New Jersey, be free from congestion on the highways. Make sure that the air is better because people around train, not in their cars. So many advantages to this Ed is unbelievable that he would take such a casual attitude.

SCHULTZ: Well, is there a national implication by taking this stand in your opinion? Going around the county being touted by many Republicans as the next best thing because he is tough on budget. What about that?

LAUTENBERG: Well, what about that is that there are two sides to that coin. One is that, he is away from the state when we desperately need constant attention. Talk about the deficits, talk about jobs, talk about programs but to be absent, campaigning across the country when New Jersey just elected him and we need desperately to have leadership? He is not providing it.

SCHULTZ: This is Governor Christie. I want you to respond to this sound cut. Here it is.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE ®, NEW JERSEY: I‘m not putting tax pairs on the hook no matter how much Senator Lautenberg, you know, wants it. My job as governor is to be responsible with the people‘s money. We haven‘t had that for a long time. I know he is not used to it, but he‘s now has a governor who is going to make sure that we have the money to pay for what we are ordering. Senator Lautenberg can do what senators do, which is talk. And what governors are supposed to do is decide.

(END VIDEO CLIP)

SCHULTZ: A cut with the dose of arrogance. Senator Lautenberg, what do you think of that?

LAUTENBERG: Well, I think as we say in the trade is a bit of baloney. The fact is that I have worked very hard to get to the $3 billion, along with Senator Menendez to get to the $3 billion commitment, the largest ever in a transit project in the history of our statement do.

SCHULTZ: Do the people of New Jersey want it, senator? Do the people of New Jersey want it?

LAUTENBERG: Yes, this people want it desperately because it means jobs, it means being able to get places on time. It means being free of congestion, which we are now masters at. And we don‘t want to become the parking lot for New York, for people going to work in New York which will happen...

Up next, we‘re getting to the bottom of Joe Millers shady security goons and their absurd arrest of an innocent reporter. The woman saw the entire thing go down, that has Miller shaking in his boots. So, he called her last night. She will tell us what that was all about, was it an apology? That is next on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ: And finally tonight, Alaska‘s republican Senate nominee Joe miller is doing some damage control. Miller is defending his higher goons for detaining and handcuffing an innocent journalist for 25 minutes on Sunday at a town hall meeting. He claims, Tony Hopfinger, the Alaska dispatch editor was out of line, and claims that Hopfinger even followed him into the bathroom. My next guest didn‘t see it like that, she witnessed the whole incident.

Lolly Symbol joins us tonight from anchorage, Alaska. Lolly, please clarify one thing. Was this a public or a private event?

LOLLY SYMBOL, WITNESSED REPORTER ARREST: This was a public—well, it was a private event but the public was invited.

SCHULTZ: OK. So, anybody could have gone to this, you didn‘t have to sign up or give money, I mean, this was open to the public, they could just go to this school and be a part of this town hall meeting because that‘s the way it was billed, is that correct?

SCHULTZ: OK. The reporter in question, in your opinion, did he deserve to be put in handcuffs?

SYMBOL: He did not deserve to be arrested constitutionally. No. He was overly aggressive towards Joe Miller a way in a way that any normal person who was not nearly as cool-headed as Joe Miller was able to maintain would have probably put him on the floor right then and there. I appreciate the fact that Joe Miller maintained his cool enough to be able to just walk away from that, but no, he was not constitutionally in the wrong. He does have the right to freedom of speech.

SCHULTZ: Was Mr. Hopfinger in your opinion, over the top in his behavior as a journalist?

SYMBOL: He was rude and awfully pushy, yes, I was just actually about to start speaking and he interrupted me, so yes, he was definitely on the rude side and overly aggressive.

SCHULTZ: Was he threatening to the candidate?

SYMBOL: No he wasn‘t. He posed no threat.

SCHULTZ: Were you aware of the security people that were there?

SYMBOL: Yes, I was.

SCHULTZ: And did they act as if they were in some official capacity?

SYMBOL: Well, they all had ear pieces. I mean, I didn‘t really speak with them and by any means, but they all had ear pieces and looked official, yes.

SCHULTZ: Does this incident change your view? I understand you are a Miller supporter. Does this change your view of the candidate?

SCHULTZ: And do you think that, as a layman, just a citizen watching this, that this should—that this reporter should follow legal action? Would you understand it if he did?

SYMBOL: No, I don‘t think that he has any means for a legal action against Joe Miller or the security team. The—Mr. Hopfinger was definitely overly aggressive and Joe Miller, you know, I can‘t blame him at all for walking away. He, you know, was just simply...

SCHULTZ: OK.

SYMBOL: .trying to protect his own personal life and, you know, his personal life absolutely has nothing to do with whether or not he is qualified to be U.S. senator or not. I believe Joe Miller is qualified.

Tonight in our telephone survey, I asked you, do you trust Republicans to play by the rules with election money? Five percent of you said yes. Ninety five percent of you said no. That is THE ED SHOW. “HARDBALL” with Chris Matthews is next. We will see you tomorrow night.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.